Sara Lee's Barnes bows out, prompting search for CEO

Daniel Acker/Bloomberg News Brenda Barnes, chairman and chief executive officer of Sara Lee Corp., speaks during an editorial board meeting in New York, Wednesday, June 17, 2009. Barnes yesterday stepped down from her post "to focus on improving her health."

Sara Lee CEO Brenda Barnes is permanently stepping down "to focus on improving her health." Barnes, 56, took a leave of absence in May after suffering a stroke.

Sara Lee’s board has initiated a search for a replacement, looking at both internal and external candidates. For now, Marcel Smits will remain interim chief executive officer, Mark Garvey will continue as interim chief financial officer, and James S. Crown will remain chairman of the board.

"We fully support Brenda’s decision to step down as Chairman and CEO so she can devote all of her time and energy toward improving her health," Crown said in a company statement.

Crown, whom the company describes as an independent director, also leads the Office of the Chairman, a group comprised of Smits and Christopher J. Fraleigh, CEO North American Retail and Foodservice. The committee was established to help Smits during Barnes’ absence.

Smits and Fraleigh are among the internal candidates likely to receive the closest consideration. Both worked closely with Barnes on her turnaround strategy.

Since Barnes arrived in 2004, the company has divested 40 percent of its businesses, including apparel, personal and household cleaning brands. Barnes and her team have reorganized Sara Lee’s meats businesses, including Ball Park Franks and Hillshire Farm. The company has made changes to its quality and supply chain, and stepped up marketing investment.

"During Brenda’s six-year tenure as CEO, she successfully transformed Sara Lee into a strong global food and beverage company with a focused portfolio of leading brands," Crown said.

"She exited low-margin businesses and dramatically increased the company’s investment in innovation, while strengthening its position in high-growth emerging markets."

Sara Lee is also looking to sell its bread businesses, according to sources familiar with the matter, including Sara Lee and Earth Grains brand breads.